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An anonymous reader writes "A federal grand jury in Washington, D.C. has indicted the companies operating the digital currency business e-gold and their owners on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business. Department of Justice also obtained a restraining order on the defendants and 24 seizure warrants on over 58 accounts believed to be property involved in money laundering and operation of an unlicensed money transmitting business. Although the restraining order does not limit the EGold operation's ability to use its existing funds to satisfy requests to exchange E-Gold into national currency for customers of non-seized accounts, virtually all major e-gold exchange services have shut down operations. This effectively freezes the assets of tens of thousands of legitimate businesses, and chills innovation in electronic cash, for the supposed purpose of impeding a handful of child pornographers. I wonder if the Fed would as readily shut down Visa or MC to stop the rampant credit card fraud that costs merchants millions every year?

In his response founder Dr.Douglas Jackson states, "With regard to child pornography, the government knows full well that their allegations are false, yet they highlight these irresponsible and purposely damaging statements in order to demonize e-gold in the eyes of the public."